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Payments NZ's API standards make payments innovation easier

Payments NZ recently announced the release of its first Application Programming Interface (API) standards. These open payments-related standards will be used as important building blocks for innovation.We reached out to Steve Wiggins, Chief Executive of Payments NZ, to find out more.

Why did you want to standardise APIs?

We’ve been seeing a strong and increasing demand for payments-related APIs in New Zealand for quite some time. This is being driven by organisations looking to use APIs to interface with financial institutions (such as banks). Globally, the use of payments-related APIs has also increased significantly. With all this in mind, simplification and improving efficiency through standardisation are the key drivers behind the Kiwi payments industry developing a shared API framework and common standards.

What’s the Payments NZ API framework?

The API framework is an industry framework for standardised payments-related APIs. It allows banks and third parties to partner in a safe, simple and predictable way. There are two main components to it: 1) the development of API standards, 2) the development of a supporting management framework.

We’ve recently wrapped up an industry API pilot which developed and delivered two common standards to market for Payment Initiation and Account Information. We’re now focused on delivering the supporting management framework – a set of industry-designed and led rules and specifications that will govern ongoing access, use and contribution to the development of our common standards.

We’ve envisioned the supporting framework as an API standards service which will take on those functions within the ecosystem. We’re expecting to launch the service in the coming months so keep watching this space.

Are there any particular use cases that Payments NZ is trying to enable with these standards?

The Account Information API will enable registered third party standards users, with customer consent, to access specific financial information relating to an account. The Payment Initiation API will enable registered third party standards users, with customer consent, to set up and make an account to account (electronic credit) payment by connecting directly and safely with banks. We’re interested to see what the market does with these standards once our new API standards service is open.

How do these standards fit with the API standards currently being released around the world?

We’ve been watching API developments in overseas jurisdictions closely. Our standards are modelled on the UK’s Open Banking Implementation Entity (OBIE’s) base standards. We have “Kiwi-ised” them to fit our local market and conditions, and this was a critical pre-requisite of the industry API pilot.

What’s next for New Zealand in terms of APIs? What can we expect to see in the coming months?

Alongside the standards release in early March, we also announced plans for an upcoming API standards service which will sit within Payments NZ. Common API standards require a range of centralised co-ordinating activities to ensure they remain fit for purpose and are well developed, managed and maintained.

The new Payments NZ API standards service will be characterised by a centralised framework. The service will be responsible for defining roles, governance, minimum standards and specifications. Standards users will bring the APIs to life by using them as building blocks to create a range of customer solutions for the market. We hope to see a wide range of organisations signing up to this service after its launch to use the standards and start coming up with new and exciting payments solutions.

Steve joined the team at Payments NZ in January 2014 to continue the evolution of cohesive and sophisticated payment system improvements through collaboration, partnerships, and ensuring a level playing field in a fast moving industry.